Corporation Tax Act 2010 section 356JFA

Expenditure on acquisition of asset: disqualifying conditions

Section 356JFA sets out two disqualifying conditions that prevent investment expenditure on acquiring an asset from qualifying as relievable expenditure for the purposes of generating cluster area allowance.

• Investment expenditure on acquiring an asset is not relievable if either of two disqualifying conditions applies to that asset.
• The first disqualifying condition is that previous expenditure by any company on acquiring, leasing, creating or enhancing the asset has already been relieved under the cluster area allowance rules.
• The second disqualifying condition applies where the asset is connected to equity in a licensed area or sub-area, earlier expenditure was incurred on the asset by any company, and that earlier expenditure related to the cluster area and would have qualified for relief had the cluster area allowance rules been in force at the time.
• References to leasing an asset mean expenditure incurred by a company under an agreement under which the asset was leased to that company.